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Hotel Management Reports

The three financial reports that we have discussed in previous articles—the Profit and
Loss (P&L) Statement, the Balance Sheet, and the Statement of Cash Flow—are used by
both management and outside parties in evaluating hotel operations. We will now talk
about two types of internal financial and management reports that hotel managers use:
• One report summarizes and presents the operating results for the previous day or
week.
• The second report forecasts or schedules operations and functions for the next day
or next week.
Managers use these reports to understand and evaluate past operations and to plan their
daily and weekly future operations. They will make any necessary changes to daily operations
to achieve budgets and forecasts or to respond to market or outside conditions.
Internal management reports are prepared by the accounting office and distributed to
hotel managers for their use. Refer again to the Financial Management Cycle:
1. Operations produces the numbers.
2. Accounting prepares the numbers.
3. Operations and accounting analyze the numbers.
4. Operations applies the numbers to change or improve operations.
The reports that we will discuss in this article are examples of the Financial Management
Cycle. Operations produces the numbers, whether they are good or bad. It is
accounting’s job to collect and prepare the management reports from these operational
numbers so that managers can use them to identify and analyze operations. Then management
can apply the information from the numbers to the next day’s or week’s operations.
The goals are to understand what happened, why it happened, and how it can be
changed or improved.
Internal Hotel Management Reports
Definition
An internal management report contains detailed operating information covering a specific
time for a specific product, customer, department, or for the entire hotel or restaurant.
It can contain the operational results for activities of the previous day or week, or it
can contain the information required to plan the next day or week. Daily and weekly
reports are used internally as management tools, whereas monthly reports are used both
as a management tool and to report the monthly financial results for the three formal financial
statements: the P&L, the Balance Sheet, and the Statement of Cash Flow.
These internal management reports are extremely valuable to operations managers.
They are a guide—a true management tool—for them to use in managing their daily
operations. The more a manager understands these reports, the better she or he will be
able to use them to improve or change operations.
Types and Uses
Reports contain daily, weekly, monthly, and quarterly information. They include reports
that provide actual operating information and financial information for previous time
periods and reports that plan in detail for future time periods. Daily and weekly reports
that provide the results of actual operations are used to forecast and schedule operations
for the next day, week, month, or quarter. Table 6.1 illustrates the types and uses of internal
management reports.
We will discuss these reports in detail, including examples of the reports used by some
of the major hotel and restaurant companies. Keep in mind that one type of report provides
historical operating information and the other type forecasts and schedules operations
for the next week.

Daily Reports
The two most important daily reports provide information on revenues and labor costs.
The names and formats of these reports can be different from company to company, but
the content is the same. They focus on providing the actual operating results for the previous
day and comparing those results with forecasts, budget, the previous month, and
last year’s information.


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